The Drilldown: Enbridge’s Line 3 pipeline delayed due to lack of long-term forecasting

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The Lead

Enbridge Inc. has hit another roadblock in its mission to expand its Line 3 crude oil pipeline, as the Public Utilities Commission has been asked to consider the certification approval by Minnesota’s Department of Commerce. The regulator has acknowledged that Enbridge has yet to come up a comprehensive estimate of oil demand in the long term, which is a “material legal error,” according to Minnesota Attorney General Keith Ellison.

Although the Public Utilities Commission has said that there will be a decrease in demand in the long term, the regulators and an administrative law judge say there will be a continued need for the extra capacity of 370,000 barrels per day of crude that the pipeline will provide for years.

There have also been requests to do reassess the certificate of need by other groups, including the Sierra Club, the Red Lake Band of Chippewa, Honor the Earth and White Earth Band of Ojibwe.

This past Wednesday, the Alberta Energy Regulator made the decision to waive a series of the province’s monitoring requirements for the oil sector, having already made suspensions for four major oil companies in the province, including Canadian Natural Resources Ltd., Imperial Oil Ltd., Syncrude Canada Ltd., and Suncor Energy.

This decision has been made following concerns that oil and gas sector companies have when it comes to meeting a series of requirements and regulations while also adhering to the guidelines in place for social distancing and safety standards amid COVID-19.

Some requirements that have been deferred during this time are soil and groundwater monitoring, as well as wildlife monitoring at in situ oilsands.

Meanwhile, STEP Energy Services Ltd., located in Calgary, has announced that it will be making cuts to its 2020 capital spending, as well as laying off staff, making wage cuts and slashing the amount of manned equipment they have as response measures to the drop in the oilfield’s production levels because of the global pandemic.

There is a population of close to 500,000 people that are part of 20 indigenous nations that live in what is called the Amazon Sacred Headwaters, located in the rainforest between the Peru-Ecuador border. Under the land are blocks of oil which cover 280,000 square miles, and Peru and Ecuador are planning to access oil in 40 per cent of this land, according to Amazon Watch and Stand.earth.

There is fear that, as the land continues to be cleared for production of soy and other grain crops, as well as for oil and mining projects, the Amazon will begin to emit carbon dioxide, instead of acting as a sponge.

“We need to find a new route, post-oil, for economic development, for the well-being of all humanity, not just indigenous people,” says Domingo Peas, a leader from the Ecuadorian Anchuar nation, in a video shared with Reuters today, on International Day for Biology Diversity.

In other news, Royal Dutch Shell Plc. has implemented response measures such as making cuts to shareholder dividends and spending as the COVID-19 pandemic continues to result in a struggling global oil market. Shell has recently revealed that it will also implement a voluntary severance for its staff and is also expected to reduce their external recruitment levels, as well as implement a review process for contracts of expatriate workers, according to Bloomberg sources.